TMI Blog2013 (9) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... s was not done by the AO, it has to be accepted that the assessment order in both years is erroneous as well as prejudicial to the interest of Revenue. - Decided against the assessee. - IT(SS) Appeal Nos. 268-270 (Ahd.) OF 2012 - - - Dated:- 28-2-2013 - A.K.Garodia And Kul Bharat, JJ. For the Appellant : S.N. Soparkar. For the Respondent : Shelley Jindal. ORDER:- PER : A.K. Garodia These are three assessee's appeals directed against the order by Commissioner of Income-tax (Central)-II, Ahmedabad ('CIT for short) u/s. 263 of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') on 27-03-2012 for assessment year (AY) 2006-07 and dated 26-03-2012 for AYs 2007-08 and 2008-09. All these appeals were heard together and are being disposed of by way of common order for the sake of convenience. First we take up IT(SS)A No.268/Ahd/2012 for A.Y. 06-07. 2. Grounds raised by the assessee are as under:- "1. In law and in facts and circumstances of the appellant's case, the order u/s. 263, passed by the Hon'ble Commissioner of Income Tax, Central-II, Ahmedabad, is bad in law and is required to be quashed. 2. In law and in facts and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO has not made proper inquiry and therefore, the assessment order is erroneous and prejudicial to the interest of the Revenue and reliance has been placed by ld. CIT on the judgment of Hon'ble Supreme Court rendered in the case of Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 (SC). ld. CIT has given the following directions to the Assessing officer to keep in mind while reframing the assessment order. These directions are as per para-16 of the order of ld. CIT and the same are reproduced below:- "16. While reframing the assessment order, the Assessing Officer will also consider the following points:- (i) On verification of the scheme of rehabilitation, it was noticed hat the 'cut of date', the date for consideration of relief and concessions as envisaged in the scheme was taken as 30.9.2006. The 'appointed date' or the date of amalgamation was 1.1.2006. Effective date was the date on which the copy of sanctioned scheme by BIFR would be filed with ROC. It is noticed that M/s. Intas Pharmaceuticals Ltd. has claimed brought forward losses of M/s. Dolphin Laboratories Ltd., in return of AY 2006-07. The claim of such business losses amounts to Rs. 43,49,59,470 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings. (iv) Further, it was noticed that the important aspect of the scheme (before BIFR) pertains to income-tax is sub-para 5 of Para 14 page 26 on Relief and Concessions. It is noted that in other sub-paras of these section, specific directions have been given to Banks and other Govt. agencies for compliance. Whereas in para 5, the BIFR has issued directions 'to consider' applicability of provisions of Sec. 41(1), carry forward and set off of unabsorbed losses and depreciation; condonation of delay in filling of audited accounts. The BIFR has not directed as to what is to be done except regarding waiver of interest on penalty of delayed payment of income-tax dues. It has only directed the department of income-tax 'to consider' various aspects. On verification of details available with this office it appears that the then AO has not verified the following aspects and issues. Accordingly, the AO is directed to also verify and take note of the following points in reassessment proceedings:- (a) In pursuance of BIFR directions, the DIT (Recovery) has issued direction vide their letter No.2(1739)/DIT(R)/BIFR/2006-07/396 dated 28.04.2010. In these directions, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per copy of receipt available on pages 2 and 3 of the paper book. It was the contention that appointed date i.e., 01-01-2006 is the date of amalgamation and the amalgamating company i.e., DLL has merged with the assessee-company from this date and hence, Assessing Officer has rightly allowed the benefit of brought forward losses and unabsorbed depreciation of DLL to the assessee-company for AY 2006-07. He placed reliance on the judgment of the Hon'ble jurisdictional High Court rendered in the case of Khurana Engg. Ltd. as Successor of M.S. Khurana v. Dy. CIT in Special Civil Application No. 605 of 2013 dated 28-01-2013. He filed copy of the said judgment on 30-01-2013. It was submitted by him that as per the judgment of Hon'ble jurisdictional High Court, the amalgamation scheme shall be operative from the appointed date but shall become effective from the effective date. He submitted that in the present case also, the appointed date i.e., 01-01-2006 should be considered as the date of amalgamation and therefore, the order of ld. CIT is not justified and the assessment order is not erroneous on this aspect. 6. He placed reliance on several judgments in support of this contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below:- "In the instant case, the Commissioner noted that the Income-tax Officer passed the order of nil assessment without application of mind. Indeed, the High Court recorded the finding that the Income-tax Officer failed to apply his mind to the case in all perspective and the order passed by him was erroneous. It appears that the resolution passed by the board of the appellant-company was not placed before the Assessing Officer. Thus, there was no material to support the claim of the appellant that the said amount represented compensation for loss of agricultural income. He accepted the entry in the statement of the account filed by the appellant in the absence of any supporting material and without making any inquiry. On these facts the conclusion that the order of the Income-tax Officer was erroneous is irresistible. We are, therefore, of the opinion that the High Court has rightly held that the exercise of the jurisdiction by the Commissioner under section 263(1) was justified." 9. In the above para of the said judgment, Hon'ble Apex court has approved the judgment of Hon'ble High Court that if assessment order is passed in the absence of any supporting material and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as date of amalgamation because it will be an advance decision. In view of the above discussion, we do not find any reason to interfere in the order of ld. CIT passed by him u/s. 263 of the Act and hence, we uphold the same. 11. In the result, appeal of assessee is dismissed. 12. Now we take up remaining appeals in IT(SS) A No.269-270/Ahd/2012 A.Y. 07-08 08-09, because issue involved in these two years is identical. The ground raised by assessee are also identical. Hence, we reproduce the grounds from A.Y. 2007-08 i.e., IT(SS) A No.269/Ahd/2012:- "1. In law and in the facts and circumstances of the appellant's case, the impugned order u/s. 263 is void and deserves to be cancelled, inter alia, for the reasons that it has been passed without application of mind. 2. In law and in the facts and circumstances of the appellant's case, the learned CIT has grossly erred in law while passing such order u/s. 263 since the original assessment order is neither erroneous nor prejudicial to the interests of the Revenue. 3. In law and in the facts and circumstances of the appellant's case, the learned CIT has grossly erred in applying the judgment given in the case of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest of Revenue and he set aside the same with a direction to the AO to redo the assessment de novo and after referring the matter related to International transaction to the TPO to determine Arm's Length Price of International transaction as required in Section 92CA of the Act read with Board's Instruction No. 3 dated 20.05/2003. 14. Now the assessee is in appeal before us against these two orders passed by ld. CIT u/s. 263 of the Act. 15. It was submitted by ld. AR of the assessee that Assessing Officer can redo the de novo assessment for International transaction only and he cannot disturb the other part of the assessment order. As against this, ld. CIT-DR of the Revenue supported the order passed by ld. CIT u/s. 263 of the Act. 16. We have considered the rival submission, perused the materials on record and gone through the order passed by ld. CIT u/s. 263 of the Act. We find that the relevant provision on the basis of which the jurisdiction is exercised by ld. CIT u/s. 263 of the Act is Section 92CA of the Act and therefore the same is reproduced below:- "92CA (1) Where any person, being the assessee, has entered into an international transaction [or specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall, by order in writing, determine the arm's length price in relation to the international transaction [or specified domestic transaction] in accordance with sub-section (3) of section 92C and send a copy of his order to the Assessing Officer and to the assessee. [(3A) Where a reference was made under sub-section (1) before the 1st day of June, 2007 but the order under sub-section (3) has not been made by the Transfer Pricing Officer before the said date, or a reference under sub-section (1) is made on or after the 1st day of June, 2007, an order under sub-section (3) may be made at any time before sixty days prior to the date on which the period of limitation referred to in section 153, or as the case may be, in section 153B for making the order of assessment or reassessment or recomputation or fresh assessment, as the case may be, expirees.] [(4) On receipt of the order under sub-section (3), the Assessing Officer shall proceed to compute the total income of the assessee under sub-section (4) of section 92C in conformity with the arm's length price as so determined by the Transfer Pricing Officer.] (5) With a view to rectifying any mistake apparent from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
